Macro

• The Fed’s Q3 Senior Loan Officer Opinion Survey of bank lending practices has a less negative tone in terms of both supply and demand, suggesting limited downside risk to investment. 
• The YTD showed a less negative tone in Q1 relative to 2023, and while Q2’s findings were similar to those of Q1.Q3 data is clearly less negative than Q2’s.
• The net percentages tightening standards on C+I loans of 7.9% for medium and large businesses and 8.2% for small, compares with 15.6% and 19.7% in Q2 respectively.

• The crowded JPY carry trade will not unwind quickly although future unwind episodes may not be as dramatic.
• The size of the carry trade is unknown, however its correlation to various asset classes is predictable.
• The largest question for global markets is whether the unwind of the JPY carry trade is a harbinger of tighter monetary conditions globally as markets decline and leverage tightens.

• VIX has become lively, reintroducing volatility to the markets
• Small caps are gaining attention after being neglected for years
• Discussion on credit cycles and potential risks in commercial real estate market, with a focus on interest rates and property values

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• US crude inventories fell for the sixth straight week by 3.7 mb, exceeding the 1.6 mb decline expected by analysts. However, gasoline stocks rise by 1.3 mb.
• For the week ending 02/Aug, US natural gas inventories were up 8.2% YoY and 14.9% above the 5-year seasonal average.
• Occidental shares surged as it beat Q2 EPS estimates by 32.5%. Exxon and Aramco also exceeded EPS forecasts, while Chevron fell short.

• Discussion on the recent market volatility, particularly in metals markets
• Gold being a standout performer, while other commodities struggle
• Challenges in finding solid investment opportunities and concerns about earnings for gold companies

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Welcome back to our monthly regime update, sharing insights from our data hub on cross-asset returns in different regimes.
• Coming into July, we wrote: “While we are not convinced of the general US recession call following the poor ISM Services report, our forecasts for the coming month place us in the ‘QE (Like)’ regime bucket – Growth lower, Inflation lower, and Liquidity higher.
• That said, our slightly rosier view on Growth (compared to consensus) leads us to consider and balance this against asset performance in the ‘Gung ho’ regime (Growth and Liquidity higher, Inflation lower).” And while, we had the input variables and our forecasts almost 100% correct, the market ended up souring substantially after the CPI report in Mid July due to the turning tide in USDJPY.

• Monetary / Caixin Explains: Why and how China’s overhauling monetary policy (Part 2)
• Housing /: Guangzhou district uses quasi-Hukou to lure new homebuyers
• Land /: Shanghai plot in high-end district breaks 2016 price record

• Hang Seng recovered by 2.48% to 17000 level and S&P 500 declined by 1.07% over the past week. S&P was particularly hit by the global stock decline on Black Monday.
• We are betting Hang Seng will be up for one more week and hence is heavily loading up call position on Hong Kong stocks.
• US market is much harder to predict in the coming month and therefore we are not easily building up any position in it first, until rate cut in September.

• Last El Niño was one of the strongest on record, and typically are followed by La Niña, but this transition has yet to occur. 
• Latest ONI Reading and trend shows possibility of La Niña developing in August-October, could coincide with winter. 
• Historically, adverse weather changes and high hurricane incidence are likely to spoil bearish bets against corn and lead to sustained price recovery.

• ASEAN will be the engine of global economic growth in the coming decades. 
• With stocks in ASEAN countries benefiting from rapid economic growth, the Premia Dow Jones Emerging ASEAN Titans 100 ETF (SEHK 2810) and FTSE SE Asia ETF (NYSE: ASEA) will thrive.
• Southeast Asia is the next “economic miracle” after the BRICs and stocks there could thrive in coming years.

• Welcome back to the weekly positioning watch.
• What a week it has been so far! The recession narrative has slowly but surely vanished from global markets, leaving the events of this Monday a clear outlier and more a question of positioning rather than anything else.
• However, there are still debates about the true causes behind the sell-off, with the position squaring in USDJPY currently dominating the headlines as the main cause.

• The first Act of this drama has played out in a very short time frame
• The trend has likely changed for the JPY and it won’t be back to business as usual for the carry trade
• This should benefit both real incomes and consumption in Japan

• Welcome to our US Inflation Watch.
• We see US CPI inflation coming in at 2.8% YoY and 0.1% MoM, with core inflation at firm  3.1% YoY and 4 bps hotter than headline on the month.
• This is clearly below the early consensus, even if a few contributors dare to forecast even lower inflation levels than us.

• Over capacity problem has plagued China’s heavy industry in the past years, especially in aluminium, steel, car, and construction.
• On the other hand, consumption upgrade has been a recent policy direction of the Central Government. Overcapacity problem will start to emerge in lower-end manufacturing products.
• As the economy produces and consumes higher-end goods, the supplies of heavy industries that end up with buildings and cars may get satisfied.

• Volatility spiked on 5 August, feeding dysfunctional dynamics. Risk assets have suffered but would be near their lows and soon recover their highs under historical examples.
• Equity prices also fell into the Fed’s first rate cut in 1998 before the tech bubble was blown. The equivalent potential for easing to prove premature is undiminished.
• There is no need for an emergency cut, and September’s monetary policy decisions should depend on the recession risk in macro data rather than on recent equity moves.

• Take aways: Prime age unemployment looks to green light a rate cut. ISM service employment surprising to the upside. The Fed will take a decision in September based on hurricane-impacted numbers.
• The Sahm rule would not have been triggered if it wansn’t for labor force entries and temporary weather related lay-offs.
• The job market is doing much better than feared by many and the Fed Funds pricing is overcooking the easing cycle.

• Autos / In Depth: New rules set to give state-owned carmakers an EV boost
• Corruption /: Former Shenzhen mayor gets life sentence for taking $15 million bribes
• Huawei /: Huawei unveils first luxury sedan model under partnership with BAIC

• Majority of the market now believes Fed is going to lower rate by 100bps to 125bps by end of this year and by 50bps in September.
• Coupled with the most recent weak job reports and stock market revision,  current market environment call for possibility  of reversal to QE.
• However, we stick to our forecast of only one 25bps rate cut in September, as inflation is still a concern and the Fed would not want to revert to QE.

• Arguably, the state of the US labor market is key to any recession call
• Despite the ongoing rise in the unemployment rate, other labor market dynamics might be at play
• One simple approach is to use the claims gap along with the unemployment rate to assess whether labor market conditions are deteriorating 

• Crude oil prices ended Monday lower but fell less than other commodities and equities. WTI dropped 0.79% and Brent fell 0.66%, while the S&P 500 declined 3%.
• Crude oil prices were supported by rising Middle East tensions, the shutdown of Libya’s largest oil field, and a sharp decline in the DXY.
• Henry Hub futures fell 1.27% due to surplus stockpiles, cooler US weather forecasts, and the impact of Hurricane Debby.

• Wheat, Corn and Soy gained on Monday even as US indices and commodities tumbled over recession woes. 
• Weaker dollar supports stronger US exports of agri-commodities. Grains and oilseeds rise as dollar weakens.
• Technical indicators and fundamental outlook remains bearish for agri-commoties. IV remains subdued at multi-month lows. 

• The milder drop in crude oil prices was reflected in energy stocks on Monday, with most major oil and gas companies, outperforming the S&P 500.
• Most of the oil companies’ volume PCR was elevated on Monday and Friday, with Haliburton’s volume PCR exceptionally high at 3.66 on Monday (5/Aug).
• On 5/Aug, all major energy companies saw a rise in implied volatility due to recession fears, except Shell, whose IV dropped slightly to 20.01% from 20.28% on Friday.

• With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. 
• Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun’24). 
• Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. 

• Champion Iron (CIA AU) reported an inline Q1 FY25, with revenue/earnings up 57%/308% YoY owing to a 34% YoY volume increase and better pricing. 
• The company reiterated its guidance for 15 million tons of production and equivalent sales. It is working on improving logistics after forest fires and other port/rail issues. 
• The stock trades at 8.5x PE and a 6% dividend yield for FY25e ( assuming iron ore prices of USD 108/ton with a 15 USD/ton premium on 65% Fe). 

• Law / In Depth: How to better protect procedural justice for criminal suspects in China
• Default /: State-backed leasing firm misses $55.9 million bond payment
• Corruption /: Former boss of Shanghai’s state-owned conglomerate tried for embezzlement and bribery 

• Good evening from Europe.
• I will keep this analysis short and sweet as I know you are all trying to deal with these nasty markets and time is of the essence.
• We have thankfully made our way through this turbulence clearly in the money, but we are starting to see interesting counter-trends arising now.

• Fears of a US recession and higher Japanese rates have sparked a market panic that may hurt Asian economies and markets in the very near term. 
• However, the Asian region should weather the storm so long as the US avoids a recession, as we believe it will. 
• Not all Asian central banks will follow the Fed in cutting rates. Improved growth in Asia and stable inflation yield a different set of tradeoffs than that facing the US. 

• Gold, silver, and copper futures fell by 3%, 6.7%, and 4.6% respectively on Monday amidst recession fears
• Gold and silver options showed bullish sentiment with significant call option buildup, while copper options saw mixed activity with high put interest in the front-month
• Implied volatility surged for gold, silver, and copper, with copper IV increasing by 7 percentage points to 27% post non-farm payroll report

• Welcome to this week’s Great Game! I know that geopolitics are probably the last thing you want to have to consider these days, but there are some scenarios we need to cover, so here’s a quick rundown of the most important geopolitical risks right now: Iran-Israel stand-off
• Situation:As discussed last week, the tensions in the Middle East are increasing.
• We are still awaiting the response from Iran following the assassination of Hamas leaders inside Iran last week and the latest assessments point to attacks on Israel in a few days.

• We have examined the quantitative data surrounding the cutting cycle to optimise the curve steepener trade for hit ratios, carry returns, and ‘max contributions.’
• This is the steepener trade you want to own in a cutting cycle!
• In our Saturday Portfolio Watch, we discussed the potential value in steepeners and promised to more thoroughly backtest the curve in order to find the optimal steepening expression in a cutting cycle environment.

• Take aways: China will be a key player for gold markets. MBS suffering even more as crude tumbles. High frequency indicators don’t scream recession in the US. 
• Hi and welcome to this week’s Energy Cable! We will do a short note this week as many of you are mostly trying to extinguish fires due to the sell-offs in markets.
• We have two major themes regarding commodities that we’ll focus on today, namely gold and crude.

• China’s economic trajectory is clarified by Xi Jinping’s statement regarding the Third Plenary’s outcome.
• Xi Jinping frequently expresses his determination to make China technologically self-reliant.
• This self-reliance in technology is seen as a hedge against external threats.

• DXY weakened by 0.8%, Yen surges by 6%, and Euro by 0.75%. Recession fears, BoJ rate hikes and subsequent unwind of the yen carry trade drove forex market volatility.
• Implied volatility (IV) for JPY options increased sharply from early July, with a surge following the BoJ rate hike and non-farm payroll report. EUR options IV reached a one-month. 
• Euro options saw a large buildup of calls for near-term expiries and a significant increase in puts for September expiries, reflecting mixed market sentiment.

• Iron ore bounced from the 100 USD/ton level and has maintained a rangebound level between 95 and 130 USD/ton for the last three years.
• Inventories at the ports continued to increase, surpassing 150 million tons, representing about 38 days of inventory (normalized levels around 35 days). 
• After Capital Group’s recent selldown, Fortescue Metals (FMG AU) looks attractive (with a trailing dividend yield of 11% and 6.5x PE) and could be worth exploring. 

• The RBA maintained its policy rate at 4.35% amid persistent inflationary pressures, aligning with the economic consensus and highlighting the challenges in achieving its inflation target promptly.
• Future policy decisions will hinge on domestic consumption trends, labour market conditions, and global economic uncertainties, with the RBA emphasizing a data-driven approach to sustainably ensure inflation returns to the target range.
• The RBA remains vigilant to upside inflation risks, prioritizing inflation targeting within its mandate, and is prepared to adjust policy settings based on evolving economic data and risk assessments.

• What a crazy day (week), starting August off with a somewhat disastrous NFP report.
• Private sector jobs are trending down, government payrolls are trending down, while manufacturing and goods-producing jobs actually improved in July despite the recessionary ISM manufacturing report.
• This is a clue that the manufacturing sector is rebounding, as we have been alluding to, which is something that will likely become relevant for markets in the coming months.

• Welcome to our weekly “The Week At A Glance” publication, where we dig into the most important key figure releases and tradeable themes for the upcoming week.
• Everything is about assessing the USD economic cycle and the potential for rate cuts of the magnitude priced in after a crazy week last week.
• We ultimately have our doubts (especially as the labor market report on Friday was heavily impacted by the storm Beryl), but we are still waiting for potential triggers to bet on it.

• Happy Sunday! What a week, and what a few months we have ahead!
• To use the words of my friend Boris Kovacevic, “it’s like 2024 never happened.” Everything we learned about the re-acceleration of inflation in H1 and the “high for longer” narrative has just vanished into thin air over the course of a few days.
• While it is hard to disagree that a cutting cycle is commencing, it is still very much up in the air whether this is a normal cutting cycle.
• We spent last week examining returns in various asset classes around the commencement of cutting cycles, and the saddening truth is that it very much depends on the type of cycle.

• In this insight, we discuss strategies for outperformance amid market convulsions and downturn. 
• In particular, we highlight six reasons why it may be a wise move to position one’s portfolio more defensively (at least for the next several months).
• Warren Buffett slashed nearly half of his holdings in Apple, which was probably one of the main triggers of the tremendous market sell off in Asian markets on Monday.

• China’s state grid is increasing spending by 13% this year, which could boost sentiment in the copper sector
• Chinese steel rebar standards are changing, leading to concerns about obsolete inventories and potential pressure on steel prices
• India’s rising demand for metals, particularly in steel production, could have a significant impact on the global market by 2030

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The July Nonfarm Payroll report showed only 114k jobs added, increasing the unemployment rate to 4.3%, the highest since 2021.
• The Sahm rule, a reliable recession indicator, was triggered with a current value of 0.53, signaling a potential recession on the horizon.
• FedWatch indicates a >90% probability of a 50 basis point rate cut in September, up from 10% last week, due to recession fears.

• The US oil and gas rig count declined by three to 586 for the week ending 02/Aug, following two consecutive weeks of increases. 
• The US oil rig count held steady at 482, after rising by 5 last week. Gas rigs decreased by three to 98, marking a second consecutive weekly decline.  
• In May, US crude oil production experienced its first monthly decline since January, while natural gas output dropped to its lowest level since February 2023. 

• The past week saw insights on Bank Central Asia (BBCA IJ), Thai Beverage (THBEV SP), Sheng Siong (SSG SP), and Delta Electronics Thailand (DELTA TB).
• There was also a macro insight on the Singapore economy from Manu Bhaskaran and a Thai banking sector post-results review from Victor Galliano with Krung Thai Bank as top pick.
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

• A monthly review of how the markets and our themes are currently performing
• Analysing what went wrong and what went right in stocks and sectors
• Highlighting positions added or removed from the thematic investment portfolio

• Sajeet Pai, a VC at Bloom Ventures, provides insights on the Indian market, discussing unique features like low levels of debt and lack of trust.
• India’s massive population presents challenges and opportunities for investors, with a large segment of the population having low per capita income.
• Cultural differences, such as the prevalence of cash on delivery in e-commerce, highlight the need for a nuanced approach when entering the Indian market.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Risk appetite is undergoing a cross-asset carry trade-driven panic and a bottom is near. The equity market is sufficiently oversold and poised for a relief rally.
• Barring some unexpected exogenous event, downside risk is limited at these levels.
• Expect a short-term relief equity rally into August, led by small caps and value stocks.

• The Fed has been a political institution since its inception, while its responsibilities have been changed over time.  Political pressure on the Fed is counter-cyclical will always prevail this way.
• Markets have become decidedly more dovish about the Fed’s policy conduct as the presidential election approaches, effectively raising the ante on the Federal Open Market Committee. 
• President Trump wishes the federal funds rate to remain unchanged until the election, but the current FOMC membership suggests at least one policy rate cut this year. 

• Gold tread new high of $2,386.10 per ounce​.  Several factors support the gold price including geopolitical instability, upcoming Fed interest rate cut, central bank purchases, and still slightly strong inflation.
• Gold’s long-term returns are actually pretty good. Investors should hold a certain proportion of gold in their positions to increase risk-adjusted returns.
• Currently, global investors hold too many risky assets such as stocks, resulting in a lower rate of return on such assets.

• Copper declined below the 9,000 USD/ton levels (WoW by -0.5%) due to weakness in financial markets caused by the Federal Reserve’s slowness in cutting rates. 
• Positive signs for copper were the Yangshan Copper Premium inflecting into positive territory and combined inventory on all exchanges being drawn down by almost 5%. 
• Lundin Mining (LUN CN) and BHP Group Ltd (BHP AU) will acquire Filo (FIL CN) for 4.1 bn CAD and develop the Josemaria project in Argentina. 

• The Hang Seng Index plunged 2.1% last Friday and fell 0.5% for the week to close at 16,945 points. A total of 7.4% have been evaporated in three weeks.
• Looking ahead to this week, the mainland will release a number of economic data, coupled with the release of blue chip stocks, it will become the focus of the market.
• The U.S. presidential candidates may toughen their stance against China. Therefore, even the Chinese stocks are cheap in valuation, foreign investors are still cautious about absorbing Chinese stocks.

• The markets have been rattled by a series of weak economic data, but it’s not time to panic. Economic growth is decelerating, but it’s not recessionary.
• The Fed is correctly signaling an imminent cut in interest rates as long as inflation data remains soft.
• The U.S. economy is in a not too hot, not too cold Goldilocks growth scenario that should be equity friendly.

• North Dakota accounts for 51% of total US spring wheat production. The region’s projected 2024 crop yield 15% higher YoY at an average of 54.5 bushels per acre.
• Large old-crop corn inventories record yield of 183-185 bpa collectively dragging corn prices down.
• Wheat vols rebounded last week after falling the prior week. Prices face uncertainty as strong exports, lower production in EU & China provides support against massive US harvest.

• The FED FOMC ended on Thursday and most analysts predict two to three rate cuts this year, while we forecast there will only be an one off rate cut.
• Our forecast already incorporate the nil prediction we were aiming at earlier, since the FOMC members have leaked their intents towards more rate cut.
• But we are still affirmative that there will only be a one-off rate cut this September, as various currencies like JPY have rebounded visibly.

• Employers added just 114,000 jobs in July — 35% fewer than expected — and unemployment, now at 4.3%, is the highest since October 2021, the Labor Department reported Friday.
• Hourly wages rose just 3.6% from July 2023, the smallest year-over-year gain since May 2021, and another sign that inflation could be heading closer to the Fed’s target.
• July job gains were concentrated in healthcare and social assistance firms, which added 64,000 jobs last month, accounting for 56% of hiring. Restaurants, hotels and bars added nearly 26,000 jobs.

• Welcome to our Weekly EM editorial.
• In light of a likely Fed cutting cycle commencing in September, we will analyze why this cycle is anything but ordinary and how the EM price cycle may disrupt standard playbooks on trading a US cutting cycle.
• Key Takeaways: Gold is likely to perform (much) worse than during a typical Fed cutting cycle. China is actively trying to cool down the gold market. The EM inflation cycle is indicative of what’s upcoming in DM markets into 2025. The Copper to Gold ratio is a screaming “buy” given this context.

• Markets are currently busy preparing for the upcoming cutting cycle from the Fed, expected to start in September.
• The simple playbook is often used when markets face a “high probability event,” and markets are now acting as if they know what’s ahead.
• A Fed cutting cycle is triggered by a recession; therefore, buy bonds, sell risk assets, and buy gold, etc.

• Trucks /In Depth: As sales surge, electric trucks could be here for the long haul
• Drones /: China adds drone components with military applications to export blacklist
• PMI /: China’s manufacturing shrinks for first time in nine months as demand falls, Caixin PMI shows

• JPY has gained momentum since prospect of Fed rate cut rises and BOJ raised interest rate.
• Yen has depreciated by 32% over the past 4 years. As dollar/yen strengthens to over 150, we believe Yen will recover to 110 level as US Treasury Yields move lower.
• As US yields lower, the USD bond held by BOJ will move higher and Bank of Japan will be forced to sell USD bond and USD to rebalance their portfolio.

• There was a significant policy divergence over the past week, with the Bank of England cutting rates, the Bank of Japan hiking rates, and the Federal Reserve subtly indicating a potential rate hike in September. Euro Area inflation also increased, which was unexpected, but was in line with our forecast.
• Despite upcoming decisions from the Reserve Bank of Australia, Mexico and Peru, macro events may not be the focus next week due to a lack of data releases on the calendar.
• There will be a flurry of data releases from the UK in the middle of the following week, and an updated monthly publication will be released.

• This insight is a book review of 주식투자절대원칙 (Absolute Principles of Stock Investment), which was written by a famous Korean retail investor called Park Young-Ok.
• Park tries to capture his 30+ years of investing wisdom. I thought this book was excellent, especially because Park included a lot of local flavor of his mindset in investing. 
• This insight provides 11 major highlights of the book ‘Absolute Principles of Stock Investment.’

• US crude inventories fell for the fifth consecutive week by 3.4 mb, exceeding the 1.6 mb decline expected by analysts. Gasoline stocks also decreased by 3.7 mb.
• As of the week ending 26/Jul, US natural gas inventories were up 8.4% YoY and 15.7% above the 5-year seasonal average.
• European oil majors beat Q2 profit estimates. BP’s Q2 underlying net profit beat estimates by 7.7%. Shell’s Q2 EPS beat estimates by 5.1%. 

• Champion Iron Ore, also known as Champ, is a premium producer in the iron ore sector with potential for increased attention over time.
• Adriatic Metals is ramping up production at their Vares silver-zinc polymetallic deposit in Bosnia, but facing challenges with cash flow and development rates.
• Cash flow issues, teething problems with mining services, and logistical challenges are hindering Adriatic’s ramp up, but they are on track to reach their nameplate by Q4.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The BoE cut by 25bp to 5.0%, as we expected, but still provided dovish news as the decision was finely balanced for and between MPC members, the consensus and pricing.
• Confidence in the forecast increased enough for a rate cut, yet risks now skew to the upside from persistently high wage inflation. It is noncommittal about cutting again.
• We still expect another cut in November before pausing amid excessive wage growth. That modal call could invert to rate hikes if the Fed also cuts prematurely.

• Market sentiment improved as the prospect of a September Fed pivot increased following the July FOMC meeting
• While the July FOMC statement and Chair Powell’s presser hinted toward a rate cut, the former seems more ambivalent than the latter 
• Although the current focus is squarely on the timing of the first rate cut, the future path of policy remains unclear at this time

• FOMC held rates steady at 5.25-5.5%, but emphasized that “a reduction could be on the table…in September”. From inflation risks alone, the FOMC statement shifted focus to its dual mandate.  
• 0.9%YoY M2 growth (Jun’24) evidences restrictive monetary conditions. Withdrawing QT after Aug’23 led to Jan-Apr’24 shocks in MoM core PCE, but latter now reined-in by resumed QT since Mar’24.
• Core PCE inflation likely to wane to 2.3%YoY by Sep’24, enabling rates to decline 25bp at each of the next 3 FOMC meetings, ignoring political threats regarding the Sep’24 cut.

• Temu / In Depth: ‘Exorbitant’ fines land Temu in hot water with Chinese merchants
• Politburo /: Politburo promises new measures to tackle local debt risks and clear economic hurdles
• Regulators /: China securities regulator names law enforcement chief as vice chairman

• Supermarket 2Q24 results were overall mixed vs our estimates, with sales decelerating amid mostly calendar headwinds, and La Comer posting the best SSS and sales performance; all of our 3 covered players still beat the industry and thus continue to gain market share, as expected.
• In terms of profitability, the 3 companies were able to post solid gross margin expansion amid efficiencies and product mix, yet SG&A pressure, amid higher labor expenses, offset most of this pressure as expected; Chedraui was the only player able to post a slight EBITDA margin expansion.
• Having recently launched our Supermarkets coverage (link to report here), we continue to see Chedraui (Outperform, P$160 PT) as the best positioned supermarket for either consumer trade up or trade down, as well as with a healthy format and geographical diversification.

• Remittances: In June, USD 6.2 billion in remittances came to the country, the highest numbers for a single month, reinforcing its role as the main source of net dollars into the country.
• The accumulated flow in the year increased to USD 31.3 billion, 3.6% more than observed in the same period of 2023.
• Remittances have increased at both extensive and intensive levels.